The Fuse
It took four days but stocks are ripping higher on some brisk pre-market turnover, thanks to good earnings from tech play Micron.
Stocks are poised to open at all-time highs on the SPX 500 and Dow Industrials right up against it. Nasdaq looks to be about 1.5% below all time highs at the open.
Of course, it is the close that matters most. A heavy dose of fedspeak today including a speech from Chair Powell.
Interest Rates are moving down as bonds catch a bid, recent selling in fixed income seems to have subsided. We have a nice bid in the 2 year bond this morning. Fed futures still see an aggressive move to lower rates by the end of the year.
Stocks around the world got this market rally started overnight, Europe higher on the STOXX by more than 1%, the US dollar fell while gold is pushing 2,700 per ounce. Crude oil is down sharply, more than 2% in volatile trade while silver is moving higher. Stocks in Asia ripped higher, Japan up 2.8% while in China the Shanghai index gained 3.6% and the Hang Seng up a robust 4.2%.
Earnings from Micron were stellar and they guided up for the next quarter and also on revenue. This served to move the entire semiconductor space upward. Accenture also posted strong numbers and guided slightly higher.
Meta Platforms has an a 2 day ‘Connect Event’ scheduled for this week, it might move the stock in either direction.
Pretty lousy day for breadth as the markets are still consolidating last week’s big post-Fed day move. Hitting new highs in the CVB (cumulative volume breadth) is always bullish, but an overbought reading such as we have had can derail that for a bit. Oscillators fell back, Nasdaq is negative once again. New highs though are crushing new lows still, that indicator is on a buy signal.
Turnover is starting to build, options expiration this Friday and next Monday could be big, but we’ll have to see how the week goes. There is certainly going to be some window dressing as the move to finish the quarter on a positive note. With only three days remaining the month of September it is looking like a win for the bulls but let’s see some volume come in an confirm it.
More support levels were not probed on Wednesday, instead just a tight range-bound market. Eventually lower levels will need to be tested, there is good support remaining at the 20 day moving average for the QQQ and SPY, the Industrials had a poor and and have some support there as well, 1.5% lower. This being the end of the quarter we may not get that pullback until next week.
The Internals
What’s it mean?
A pretty boring day, typical of what we have been seeing so far this week. But there is some hope later today as we have Chair Powell speaking along with some of his Fed colleagues. As for the internals, VOLD was decidedly bearish, the TICKS were super red all day and the put/call ripped higher by end of day. But note the VIX remains low, and even the dips are being bought. Certainly with poor breadth we could expect a bit more negative action, but so far this consolidation seems standard, and probably almost over.
The Dynamite
Economic Data:
- Thursday:jobless claims, durable goods, GDP revision, lots of Fed speakers including Powell
- Friday:August PCE, inventories, consumer sentiment, Miki Bowman
Earnings this week:
- Thursday:ACN, JBL, COST, BB
- Friday:N/A
Fed Watch:
Several Fed speakers this week including a speech from Chair Powell on Thursday. We don’t expect too much other than some clarity following last week’s big rate cut and forecast for more. Miki Bowman, a hawkish Fed Governor will be speaking on Friday.
